The World May Not End March 12, 2009March 13, 2017 DAZZLED Will Alford: “I too am absolutely dazzled each time I fly. Every time I see a plane from the ground, or see the ground from a plane, and every time I board a jet I say to myself, ‘What would Wilbur and Orville say if they could see this?!’” THE $2 TRILLION SOLUTION? Joel G.: “Why don’t we sell memberships in the United States of America (a member becomes a citizen after a short period), the cost is $1 million per approved person and we’ll take up to 2 million people (probably won’t even notice them). I think that’s $2 trillion (plus all the other wealth and productivity they bring with them).” ☞ We could sure use the money. THE WORLD MAY NOT END Writing in yesterday’s Financial Times, Jeremy Grantham, one of the very smartest guys around, presents a bluntly sober but not apocalyptic overview. Where not long ago we had $50 trillion of perceived wealth (stocks and real estate) in a country with $25 trillion in private debt, now that $50 trillion has shrunk to $30 trillion* – and creditors have grown very nervous about the $25 trillion they’ve loaned. He foresees a rather painful multi-year workout, a combination of some inflation (which erodes the real value of a debt), of some write-offs (which wipes it out entirely), some growth and multi-year paydown. “It will not be pleasant but not the end of the world. When it’s over all the same houses, office blocks, factories and educated workers that make up our real wealth will be waiting to be fully used again and we will be travelling lighter without so many illusions. We have not lost real wealth, only the illusion of wealth.” *He puts that $20 trillion loss in context this way: it’s about 150% of one year’s GDP. That compares with a loss in perceived value three times Japanese GDP a generation ago (a collapse the Japanese are still working through). But it also compares, he says, with a loss in perceived value of only 75% of a year’s GDP in the Great Depression. Certainly (my words now, not his), our true wealth remains more or less unchanged: our technology, our natural resources, our homes (even the ones currently unoccupied) and farms and tractors and tools and computers, our factories and skyscrapers and hospitals. The house next to mine rose 6-fold in “value” from 1998 to 2005, but was not even one square foot bigger or more useful. So has it really lost half its value at today’s asking price? Or is it still the same modest two bedroom, one bath house with a great big tree on a double lot? ☞ On the theory the world may not end, I bought back the American Express (AXP) I sold two years ago, five times higher; and a little Wells Fargo (WFC) trading for about a third what it was then. Both of these entail clear and obvious risk, so feel free to laugh at me if/when they go bad. OFA John M: “I contributed to the DNC in the run-up to the election and continue to receive appeals from the party now that it is over. But I ask myself, ‘If certain Democrats in Congress can’t be persuaded to support the President’s agenda, why should I give more money?’ Republican opposition I can understand, if despise. Democratic opposition, under these circumstances, is inexcusable.” ☞ The main focus of the DNC now is a project called Organizing For America – what will soon be a huge cadre of neighborhood advocates in all 50 states to help push the President’s agenda. I hear your frustration; but if we don’t help by funding this effort, WE will be the ones missing an opportunity to be team players. As to Dems who occasionally vote like Republicans, typically they are from “red states,” where, if they hadn’t won, their opponents would almost never have voted with us. So there is at least that silver lining. MITCH HEDBERG John Seiffer: “If you like Steven Wright, you’ll probably like Mitch Hedberg.” ☞ There’s only one Steven Wright, but I liked these three: One time, this guy handed me a picture of him, he said, “Here’s a picture of me when I was younger.” Every picture of you is when you were younger. “Here’s a picture of me when I’m older.” “You son-of-a-bitch! How’d you pull that off? Lemme see that camera!” The depressing thing about tennis is that no matter how good I get, I’ll never be as good as a wall. I saw this wino, he was eating grapes. I was like, “Dude, you have to wait.”